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New Delhi, 21st October: Institutional investments in the real estate sector witnessed an annual growth of 41% in Q3 2024, reaching USD 0.96 Bn. However, it sharply declined from USD 3.1 Bn record investments received in the previous quarter. Despite this significant quarterly decline of 69%, the outlook remains positive as investment nearly touches a billion mark.
| Quarters | Institutional Investments
(USD Bn) |
Quarterly Change
(%) |
| Q3 2023 | 0.7 | -57% |
| Q4 2023 | 0.8 | 18% |
| Q1 2024 | 0.6 | -31% |
| Q2 2024 | 3.1 | 464% |
| Q3 2024 | 0.96 | -69% |
Source: Vestian Research
The significant uptick in investments compared to the previous year is a testament to India’s robust economic growth amid prevailing geopolitical challenges. As a result, the share of foreign investors increased from 27% in Q3 2023 to 46% in Q3 2024. Conversely, the share of domestic investors declined to 43% in Q3 2024 from 71% in the same quarter a year earlier. However, the decrease was only 15% in terms of value.
Shrinivas Rao, FRICS, CEO, Vestian said, “Investors have shown confidence in India’s growth story on the back of robust GDP growth. As a result, the real estate sector witnessed increased participation from foreign investors which led to institutional investments touching a billion mark in Q3 2024. Additionally, domestic investors are also actively participating, supported by the rapid infrastructure development across the country.”
| Investor Type | Institutional Investments
(USD Mn) |
% Share | % Change | |||||
| Q3 2024 | Q2 2024 | Q3 2023 | Q3 2024 | Q2 2024 | Q3 2023 | Q3 2024 vs Q2 2024 | Q3 2024 vs Q3 2023 | |
| Foreign | 436.5 | 2,218.1 | 182.6 | 46% | 71% | 27% | -80% | 139% |
| India-dedicated | 414.6 | 637.9 | 485.2 | 43% | 21% | 71% | -35% | -15% |
| Co-investment | 109.8 | 260.2 | 12.1 | 11% | 8% | 2% | -58% | 807% |
| Total | 960.8 | 3,116.3 | 679.9 | 100% | 100% | 100% | -69% | 41% |
Note: Co-investment refers to joint funding by foreign and domestic investors.
Source: Vestian Research
Residential assets were the first preference for domestic investors during Q3 2024 whereas foreign investors accounted for 64% of the commercial deals. Growing prominence of work-from-office mandates and GCCs (global capability centres) lured foreign investors, leading to an increase in the share of commercial investments from 24% in Q3 2023 to 71% in Q3 2024. On the other hand, the share of residential sector reduced to 19% in Q3 2024 from 44% in the same period a year earlier. However, investment in residential assets is expected to grow in the coming quarters as niche asset classes such as co-living, senior housing, and serviced apartments are gaining traction.
| Asset Type | Institutional Investments
(USD Mn) |
% Share | % Change | |||||
| Q3 2024 | Q2 2024 | Q3 2023 | Q3 2024 | Q2 2024 | Q3 2023 | Q3 2024 vs Q2 2024 | Q3 2024 vs Q3 2023 | |
| Commercial | 684.5 | 622.3 | 164.1 | 71% | 20% | 24% | 10% | 317% |
| Residential | 181.1 | 732.8 | 298.3 | 19% | 24% | 44% | -75% | -39% |
| Industrial & Warehousing | 95.2 | 1,500.0 | 190.3 | 10% | 48% | 28% | -94 | -50% |
| Diversified | Negligible | 261.2 | 27.2 | NA | 8% | 4% | NA | NA |
| Total | 960.8 | 3,116.3 | 679.9 | 100% | 100% | 100% | -69% | 41% |
Note: Commercial assets include office, retail, co-working, and hospitality projects.
Source: Vestian Research
Furthermore, Chennai received the highest investments during Q3 2024 with 48% share. Majority of investments in the city were concentrated in industrial & warehousing, commercial, and residential sectors.
Moreover, proptech platforms have also garnered traction with 22% share of total investments recorded during Q3 2024. The share is likely to inflate further with the extensive use of artificial intelligence and machine learning in the real estate sector.
